Correlation Between SPDR EURO and IShares
Can any of the company-specific risk be diversified away by investing in both SPDR EURO and IShares at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining SPDR EURO and IShares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR EURO STOXX and IShares, you can compare the effects of market volatilities on SPDR EURO and IShares and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in SPDR EURO with a short position of IShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR EURO and IShares.
Diversification Opportunities for SPDR EURO and IShares
Very weak diversification
The 3 months correlation between SPDR and IShares is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding SPDR EURO STOXX and IShares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IShares and SPDR EURO is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on SPDR EURO STOXX are associated (or correlated) with IShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IShares has no effect on the direction of SPDR EURO i.e., SPDR EURO and IShares go up and down completely randomly.
Pair Corralation between SPDR EURO and IShares
If you would invest 3,301 in IShares on August 25, 2024 and sell it today you would earn a total of 0.00 from holding IShares or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
SPDR EURO STOXX vs. IShares
Performance |
| Timeline |
| SPDR EURO STOXX |
| IShares |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
SPDR EURO and IShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR EURO and IShares
The main advantage of trading using opposite SPDR EURO and IShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR EURO position performs unexpectedly, IShares can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in IShares will offset losses from the drop in IShares' long position.| SPDR EURO vs. WisdomTree Europe Hedged | SPDR EURO vs. WisdomTree International Hedged | SPDR EURO vs. WisdomTree Emerging Markets | SPDR EURO vs. WisdomTree Dynamic Currency |
| IShares vs. iShares MSCI Hong | IShares vs. HUMANA INC | IShares vs. SCOR PK | IShares vs. Aquagold International |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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